I’ve been hearing some terrible things about bitcoin over the last few days, and I have to tell you, it has me worried.
First, Mt. Gox decided not to deal effectively in USD for what they say will be two weeks while they upgrade their ability to process payment requests. Not a good thing for an exchange to be doing in the first place, and doubly not good for an exchange that had an account frozen by FinCen just a few weeks ago. It turned out that they had not properly reported that they were in the money transfer business on a form filed with their bank at the time that they first opened the account. This tends to make investors skittish.
Next, the California DFI decided to send a Cease and Desist order to the Bitcoin Foundation in the event that they might be conducting money transmission services. This request was, on the face of it, ridiculous. It was a transparent attempt by that regulatory body to put the whole bitcoin world on notice that they are watching. As though we haven’t noticed that the government is watching after the revelations of Edward Snowden. (Shhh. The NSA might be is listening).
Then there is the eruption over Atlantis, the new, BTC/LT drug market that began, interestingly, advertising openly on YouTube. I guess this is their attempt to unseat SilkRoad as the nadir of the bitcoin world. This created another flurry of articles in the mass media about how bitcoin and other altcoins are for criminals and druggies.
Am I worried that these things are signs that the bitcoin economy will come crashing down at our feet? No.
In point of fact, I am not worried much about bitcoin at all. I’ll tell you what worries me a bit.
What is notable about all the bad press that bitcoin gets in the mainstream media, is that the price of bitcoin has remained stable. It has lost value over the last few days, but it has not crashed and the prospects for it jumping to far higher values remains strong.
At the same time as we are getting all of these negative reports about bitcoin, we are also hearing of polls saying that more and more people are aware of bitcoin. We are hearing that more and more customer-facing businesses are adopting bitcoin, and we are hearing that investors are placing bets on bitcoin businesses.
The people who are investing in bitcoin now are doing so because they are the far-seers among us. They are the ones who look at the corrupt political system that caters to the rich and cares only about its own power. They see the Masters of the Universe on Wall Street cheat the system and at best, walk free. At worst, they get a job in government. We see rampant fear-mongering about things that don’t matter while the real crises in our environment and economy go discussed.
The people investing in bitcoin now are looking for a game changer. They see that the game is rigged against them and they are looking for an equalizer.
That is the drum that beats steadily behind bitcoin. It is driven by fear of what the world might become mixed with hope for what we can achieve.
As people continue to lose confidence in the government, in the financial systems, and in the justice system, they will look for a way to loosen the grip that those institutions have over them. And although I do not believe that bitcoin is, or even should be, the libertarian dream that it is sometimes described as, it is certainly a game changer. And just adding this to the mix may be enough for us to get a virtuous circle going.
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